Many people dream of being able to enjoy traveling and are drawn to the lure of owning a recreational vehicle (RV). However, they may not realize that owning an RV could impact their government benefits, especially Supplemental Security Income (SSI) and Medicaid.
Qualifying for Means-Tested Benefits
SSI and Medicaid are “means-tested” benefits; to receive them, an applicant must meet strict income and asset limits.
When someone qualifies for SSI, they will typically also be evaluated for Medicaid. In many cases, access to comprehensive medical care through Medicaid is more important for a person with special needs than the small cash award from SSI and is the main reason for applying. This makes SSI a critical program for millions of Americans.
However, qualifying for SSI and Medicaid are contingent on meeting certain criteria. Each program has its own rules about how much a person may have in income and assets (resources).
Supplemental Security Income and Medicaid
SSI is a federally administered program with its own income and resource limits. To qualify for SSI, an individual applicant may not have more than $2,000 in resources. The applicant must also not exceed the SSI income limits. This means that, as of 2023, they must earn less than $1,913 (pre-tax/deductions) per month from work or receive less than $934 per month from non-work sources such as retirement.
In contrast, Medicaid is administered at the state level, and different rules may apply depending on the state in which you live.
For example, in New York, an individual applicant may not exceed the income limit of $1,677 per month or the asset limit of $30,182. (Note that a different amount applies for the aged, blind, and disabled.) Just next door, in New Jersey, the income limit for an individual is $2,742 per month, and the asset limit is $2,000. (Again, a different amount applies for the aged, blind, and disabled.)
In evaluating a person’s application for these benefits, certain assets count toward the asset limit while others do not.
Examples of what are “non-countable” include the following:
- personal belongings
- household items
- one automobile
- a person’s primary home
Other items can also vary state to state. For instance, in New York, pre-paid funeral arrangements don’t count; in New Jersey irrevocable burial trusts don’t count.
Is Owning an RV the Same as Owning an Automobile?
An RV is not the equivalent of an automobile and cannot pass as the person’s one “non-countable” primary vehicle. It will count toward the asset limit and, depending on the benefit and applicable rules, likely exceed that limit.
Therefore, if an SSI beneficiary owns an RV in their name, it will most likely render them ineligible for SSI. This is because the vehicle’s value is almost certainly going to be over the program’s $2,000 limit.
In some states, such as New York, the person may, however, qualify for Medicaid under larger asset limits. It should be noted that under some circumstances the information above may not apply if the RV serves as the beneficiary’s home.
If you are considering purchasing an RV or currently live in one, you should speak with an experienced special needs planner about the intricacies of this. They can help you understand how it may affect your ability to qualify for SSI and Medicaid.
If owning an RV for recreational purposes is something you wish to pursue, there may be another way you can own one without running into problems qualifying for means-tested benefits.
A Potential Solution: Special Needs Trust
One such option is making use of a special needs trust funded with third party’s money and then purchasing the RV in the name of the trust. The trust would hold title to the RV and would have to insure it and pay for any applicable registration, taxes, and upkeep. The trust would also be potentially liable if the RV injures someone and insurance does not cover the crash.
However, if the trust is properly drafted by a qualified special needs planner, it will allow the beneficiary to enjoy traveling with the RV without having to worry about losing or failing to qualify for SSI or Medicaid benefits.
If you are interested in purchasing an RV with a special needs trust, or if you own an RV and are worried about your benefits, talk with your special needs planner.